The Wal-Mart Discrimination Debate Plays to a Full House . . . and Feisty Judges

The bad news, from where we sit: Neither side emerged as the clear winner during Tuesday’s oral arguments out in San Francisco over class-certification in the proposed Wal-Mart sex-discrimination class-action. (We like finality.) The silver lining: the suspense in the case will continue to build (We like suspense.)

Squaring off on Tuesday: Gibson, Dunn’s Ted Boutrous, who argued for the company, and Brad Seligman of the Impact Fund, who argued for the plaintiffs. (After a three-judge panel ruled for Seligman’s side back in early 2007, we anointed him lawyer of the day. Click here for that post.) On Tuesday’s argument, click here for the Recorder article. Click here for a “curtain-raiser” (as we say in the biz) from Monday’s Journal.

The quick backdrop:

The case began in 2001 when a 54-year-old Wal-Mart employee from California named Betty Dukes alleged in a discrimination claim that she was denied the training needed to obtain a higher-paying job because of her sex.

After a lower court allowed the case to proceed as a class-action, it grew to include more than 1.6 million women who have worked at Wal-Mart since December 1998. The class status was upheld by a three-member panel of the court of appeals in 2007. But Wal-Mart asked for a en banc rehearing, arguing that even if the plaintiffs prevail in getting class certification, punitive damages and back pay must be awarded on an individual basis, rather than on a class basis.

All the while, Wal-Mart has denied the allegations of discrimination on the basis of sex.

So what happened yesterday? According to the Recorder article, the more liberal judges of the 11 selected to serve on the en banc stuck it to Boutrous. For instance, when Boutrous argued that the district court applied the wrong standard in granting certification to female Wal-Mart workers, Judge Marsha Berzon pointed out that the women didn’t have to prove actual discrimination at this point, just commonality of the class.

Moments later, when Seligman explained that Wal-Mart broke the law when the company delegated promotion and pay authority to regional managers — who discriminated — Judge Pamela Rymer wondered how and why plaintiffs could justify a national class.

Judge Susan Graber, however, wondered whether the court could tread an altogether different path. “What are the range of options we have? It seems like there’s lots of ways to slice and dice this,” she said.

Seligman reportedly agreed, saying the court could, for example, carve punitive damages out of the existing class certification — but allow claims for back pay to remain.

And that’s, at least for the time being, what we’re left with, LB readers. (Big sigh.) When the case heads back to the Northern District — in whatever form — Chief Judge Vaughn Walker will hear it, since the original lower-court judge, Martin Jenkins, who briefly played professional football for the Seattle Seahawks, moved to the appellate bench.

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The Law Blog covers the legal arena’s hot cases, emerging trends and big personalities. It’s brought to you by lead writer Jacob Gershman with contributions from across The Wall Street Journal’s staff. Jacob comes here after more than half a decade covering the bare-knuckle politics of New York State. His inside-the-room reporting left him steeped in legal and regulatory issues that continue to grab headlines.

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